President Bush has reacted to the latest developments in the Middle East, issuing warnings to Palestinians forming a new government following a parliamentary election victory by the radical group Hamas, and Iran over its nuclear ambitions.

The Bush administration says the United States is providing about $234 million for Palestinian development and other needs.

President Bush told the CBS television network Friday that aid would be cut off to the next Palestinian government unless election winner, Hamas, abolishes its military wing and renounces violence against Israel.

"For them to, you know, have support from the United States Congress, and from this administration, they must renounce their policies, stated policy that they want to destroy Israel," he said.

The United States views Hamas, which won a majority of seats in the Palestinian parliament Thursday, as a terrorist organization.

On the issue of Iran, Mr. Bush warned that sanctions are a "real possibility" against Iran for its controversial nuclear program.

The United States says Iran is secretly seeking to develop nuclear weapons. Tehran says its program is meant for peaceful purposes.

Mr. Bush says a free world cannot allow Tehran to have a nuclear weapon. The president said he is open to all possible options for dealing with Iran, including military intervention.

"I think it's best I just leave it that all options should be on the table, and the last option is the military option. We have got to work hard to exhaust all diplomacy and that's what you're - that's what the country is seeing happen," he said.


In a resolution passed without debate, the Senate condemned what it said were "the many failures of the government in Iran to comply faithfully with its nuclear non-proliferation obligations."